Short Run Cost

Short run costs include the ideas of total cost, average cost, and marginal costs. While it is important as a business to understand these costs I believe that they must be utilized as a tool to allow for long term success of the business and not as a quick decision tool. Small businesses are often started with limited financial backing and therefore are susceptible to small changes within their business plan. If sales are not at a projected level for a quarter then the business may lay off employees when in fact the best course of action would be to maintain these employees and focus on building sales.
This does bring about an entirely separate issue of businesses starting without a well-thought business plan but this happens so often that I am willing to ignore that and look at how they can succeed despite that failure. Short run costs can be affected by a variety of factors such as increased demand, unexpected weather, labor disputes, and so on. It is the ability of the business to weather the unexpected events of the present and focus on the growth in the long run.
I believe that short run costs are a very important function of business. They need to be examined carefully to determine how certain changes in the business effect the long term success of the business. Without careful examination of these costs a business owner would not be able to continue evolving the business in order to grow.

Questions of Utility

A few weeks ago we discussed the concept of Utility (benefit), which is the question of how much do you want an item. The overall goal for an individual is to maximize utility with their choices. We looked at this with examples of one good in exchange for another, but I am thinking of utility in a bit larger sense.

My wife and I recently made the decision that I would return to school and complete my Bachelor's Degree. This decision was made by comparing the overall costs to the long term benefits. The initial costs are numerous due to the reduction in my monetary contribution to the household, these can include nights out, new clothes, vacations, new furniture, and many more items which make life more enjoyable. The benefits are not guaranteed though, which makes me question the role of risk in the equation of utility. If I complete my schooling, and am able to secure a position due to my degree then my utility was reasonable. If I am either unable to complete school, or unable to secure a position due to the degree earned then I have sacrificed valuable time and money to go to school unsuccessfully.

In this situation, my utility cannot be determined until many years after the initial decision was made to go down this path. So is utility actually a perceived concept or is it more of potential utility than a guaranteed thing?